Uncertainty around Credit Suisse (CSGN.CH) is overshadowing published macro readings and other economic pain today, with new information regarding the Bank's situation emerging at an unusual rate. This morning saw a huge sell-off in the Bank's shares, with the scale reaching up to 30%. However, the situation abruptly turned around closer to midday, when the company's shares rebounded and reduced losses by nearly 15%. At the end of today's session, further downward momentum was initiated by the Financial Times, which reported that CS had approached the SNB to have the central bank publicly assure the bank of its potential support in times of uncertainty.
Why did Credit Suisse lose so sharply?
The bank's shares, as well as the CS business itself, have been under tremendous pressure for many years now, and the persistent downward trend actually began as early as 2007. The current declines are exacerbated and mainly triggered by the uncertainty surrounding the US banking sector and systemic liquidity. It is worth remembering, however, that the CS crisis has been dragging on for many years and the company's financial structure seems at the moment immune to liquidity risks. Investors' attention, however, is focused on another aspect, namely Credit Default Swaps (CDS), which hit new historic highs today.
At the moment, the probability of Credit Suisse failing is 3.19% on a 2-year basis. Source: Bloomberg
Credit Suisse asks SNB for public support
Credit Suisse has asked the SNB for public assurances of possible assistance, the Financial Times reported. If the situation worsens, Swiss regulators will have to react and provide support to the globally key bank, financial analysts added. What's more, government regulators from Europe and the US have said they are looking at what exposure Credit Suisse has to local markets, further spooking investors. 
The Financial Times' news on the SNB's request for help has once again initiated a downward momentum on the bank's shares. Source: xStation 5
